All-Star Panel: Debate over extent of government surveillance

This is a rush transcript from "Special Report," August 8, 2013. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: The back in forth about what the NSA is doing, the latest developments. This comes as some new Fox News polls come out. This break down in party self- identified, 38 percent Democrats, 37 percent Republicans, 23 percent independents. But as you take a look at these numbers about the question of phony scandals, is it a phony scandal or serious situation, take a look at these numbers -- Benghazi 78 to 17, NSA 69 to 26, the DOJ scandal that involves the investigation of James Rosen 59 to 31 and the IRS 59 to 33. And then on the issue of Benghazi and the Obama administration, trying to cover it up 62 percent, open and transparent 27 percent.

With those polls let's bring in our panel, Judge Andrew Napolitano, Fox News senior judicial analyst, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. Judge, you just heard the president, what he said about the program. We don't have a domestic spying program.

JUDGE ANDREW NAPOLITANO, FOX NEWS SENIOR JUDICIAL ANALYST: Bret, this is as distressing – what the president said and what the president has done is as distressing anything I have observed the government doing in my entire professional life. This president has orchestrated an end-run around the Constitution of gargantuan proportions. He approved it. He authorized it. He knows its extent. He did it in secret and now he is denying that it exists.

The federal government in order to make their job of catching bad guys easier, they are determined to catch bad guys, god bless them for that, has decided to sweep up the private communications of everybody else as well. If the Constitution and the Fourth Amendment were written for anything they were written to prevent exactly that.

BAIER: He's not the only president --

(CROSSTALK)

NAPOLITANO: George W. Bush did it as well. And you and I debated it and I expressed a similar view at the time. This is far grander in scope. You just had Congressman Justin Amash on. He is correct. This is every e-mail and every phone call and every text of every American who uses the telephone and the Internet and who doesn't going back to early 2011, and the president has denied it.

BAIER: A.B., when you look at these polls on the situation and you hear what the administration is saying about all of this stuff, there is a disconnect here. And is there a credibility gap in what they are saying and whether it is getting through?

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Well, I think there are different stories. I think on the NSA people would say that is not phony, it is serious. But again, the fact that Americans' communications go into an assessment system, they have told us they can do a lot with it. They do a little, they don't do much without a warrant. The system has no ability to perform retroactive searches. And they involve a party outside of the U.S.

The NSA story has become a water cooler joke. It doesn't mean that it's phony. It means that no one was surprised it was happening and that most Americans believe it's necessary. That said, the fishing expedition into activities of the press, designating James Rosen a suspect under the Espionage Act, and Benghazi, those are different to me than the NSA story because it involves the administration doing things before, during, and after where it looked like they weren't entirely telling the truth. The NSA program, as you point out, was not birthed in the Obama administration. They said that they put in some safeguards and minimizations. The intelligence committee lawmakers I have spoken believe those minimizations were adequate. The rank and file, like Justin Amash, did not avail themselves of enough information about the programs. So I would say to me those are separate than the other scandals.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, I think what we had learned up until now is not that disturbing, the idea that you are tracking information about the phone calls and not the details. But the problem is that every day we are learning something that was not admitted a day before. As you mentioned, the story in The Times is we had been led to believe that they are only tracking the content of calls between somebody in the U.S. and somebody abroad who is a terrorist suspect. But apparently that is not so. It is somebody at home with somebody abroad who is giving or had some information embedded in the e-mail that could be related to a terror attack.

Now, that is a different proposition, and it leads to the suspicion what are we going to learn tomorrow. What are they hiding today that we are going to learn tomorrow? Second, there is also a story about the DEA, the Drug Enforcement Administration using the information from the NSA. Now, I may be willing to sacrifice a little of my privacy to prevent a 9/11 that killed 3,000 people. But to contribute to a drug war that we are losing anyway is a problematic endeavor in the first place and is deeply corrupt, is not something I would want to do.

BAIER: Let me explain that. The DEA, the story is that they essentially get tips about this, about go-to, pull over this car at this place and they don't say where that information came from. Judge, is that a major problem?

NAPOLITANO: Yes, it is a very major problem, especially in light of the fact that the IRS manual reflects that DEA agents were told, and hence IRS agents, because it was in their manual, not to reveal to federal prosecutors the true source of the information.

BAIER: So when you hear law enforcement say, hey, this has been going on for a long time what do you say?

NAPOLITANO: They have been breaking the law for a long time, because when a federal agent lies during an investigation, even to another federal agent, that is a felony. And this could actually end up an enormous Pandora's box for the administration. They have a lot of convictions in these cases. They took a lot of bad people off the streets. Guess what, many of those convictions are now ripe for reversal because defense counsel and judges were lied to. Unwittingly by federal prosecutors -- I can't imagine federal lawyers knew about this. Federal agents gave false information to federal prosecutors who re-gave it to judges and defense counsel in violation of court rules. That's enough to upset a conviction.

KRAUTHAMMER: The worst part of it is that we learned it is routine and has been for a long time for a federal agency to fabricate a backstory in a drug case and present it to a court. That is truly appalling.

BAIER: I don't want to bury the lead here, A.B. -- to go back to NSA. General Keith Alexander, the head of the NSA, today, saying that they are taking this dramatic step of cutting down nearly 1,000 system administrators employed by his agency or hired as contractors to avoid the Snowden-type access -- 1,000 people.

STODDARD: We don't even know if that would help. The problem is we know so little about how Snowden was able to throw this entire thing on its ear. And contractors versus regular government employees with security clearances, we don't even know that just tossing out 1,000 employees is going to make a difference that could prevent this from happening again.

NAPOLITANO: Because we don't know how many employees they have.

BAIER: We don't know a lot, Judge. We don't know a lot.

NAPOLITANO: You're right. You're right. We know more about the Federal Reserve than we do about this and the Fed is very secretive.

KRAUTHAMMER: What we know is that what we know today will not be true tomorrow.

NAPOLITANO: Yes.

BAIER: Next up, is the head of the Republican Party getting a little too big for his britches on the issue of debates? He was on this show. We'll ask the panel.

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